MNI ASIA OPEN: Treasury Yields Retreat Ahead April Jobs Data

EXECUTIVE SUMMARY

• MNI US DATA: A Conflicting JOLTS Report
• MNI US TSYS/SUPPLY: Refunding Preview: Pushing Back The Terming Out
• MNI TARIFFS: Tariff Revenue Can Provide Tax Relief In Upcoming GOP Bill - Bessent
• MNI US DATA: Largest Goods Trade Deficit As % GDP Since 2006
• MNI US DATA: Conference Board Confidence Report Sends Recessionary Warning

US

MNI US TSYS/SUPPLY: Refunding Preview: Pushing Back The Terming Out

From our preview of Wednesday's quarterly Refunding announcement, which is at 0830ET (PDF link): Recent market volatility has reduced the possibility that Treasury will adjust its guidance that it will keep nominal coupon auction sizes unchanged for “at least the next several quarters”, as changing this would signal an intention to increase bond supply in the near future. 

Future Coupon Upsizing: Treasury Secretary Bessent said in February that a terming out of the Treasury’s maturity profile was "a long way off, and we're going to see what the market wants". With the Treasury curve steepening sharply since then with term premia rising amid tariff-related market volatility, it doesn’t seem like an opportune time to test the waters. Additionally, fiscal dynamics don't yet make an upsizing urgent, and indeed some analysts think the next move for coupon sizes could be down, and not up. For now MNI is penciling in nominal coupon issuance rises in February 2026’s refunding – see table below.

NEWS

MNI TARIFFS: Tariff Revenue Can Provide Tax Relief In Upcoming GOP Bill - Bessent

Summary of Treasury Secretary Scott Bessent’s remarks at a recently concluded press conference at the White House. He covers much of the same ground as interviews with Fox and CNBC yesterday. Asked if the ultimate goal of tariffs is long-term revenue or favourable trade deals, Bessent says “it’s a combination of both.” Adds: “We’re going to take in long-term tariff revenue,” and stresses “18 important trading relationships” with whom the administration will continue negotiations in the coming weeks.

MNI US: Markups Get Underway, White House Targets July 4 Reconcilliation Deadline

Treasury Secretary Scott Bessent told reporters yesterday that the White House is targeting July 4 as an “aspirational” deadline to get the ‘big beautiful bill’ that covers the bulk of Trump’s tax, spending, energy, and border security agenda through Congress and to Trump’s desk. Bessent said: “We’ve got three legs to the President’s economic agenda, trade, tax and deregulation, and we hope that we can have this tax portion done by Fourth of July,”

MNI US-JAPAN: Fox Business: US-Japan Deal Still Not Ready

Charles Gasparino at Fox Business posts on X: "According to people close to the White House the deal w Japan is still not ready to be announced. Could be a week or so away. Negotiations center on Japan buying from the Alaska LNG pipeline..." Japan's Economic Revitalisation Minister and chief tariff negotiator, Ryosei Akazawa, will travel to Washington, D.C., from 30 Apr-2 May to hold a second round of talks with US Treasury Secretary Scott Bessent and other senior officials on reaching a trade agreement. 

MNI CANADA: Liberals To Lead Next Gov't, Conservative Leader Set To Lose Seat

Prime Minister Mark Carney's centre-left Liberal Party has secured a fourth consecutive term in office following an election campaign that has seen one of the most notable changes in fortune in recent Western political history. The Liberals look set to have secured 168 out of 343 seats, an increase of eight from 2021 and four short of an overall majority. Despite the most recent polling and betting market probabilities showing a Liberal majority as the most likely outcome, even retaining top spot will be viewed as a remarkable turnaround for a party that stood ~20-25% behind its centre-right Conservative party (CPC) opponents at the start of the year. 

MNI CANADA: Carney's Liberals Look Around To Potential Allies To Face Down Trump

With almost every riding (seat) declared, PM Mark Carney and his centre-left Liberal party will, in the days ahead, be looking to secure either a coalition or a confidence-and-supply agreement with opposition parties that will enable the gov't to command a majority in the House of Commons. 

MNI SPAIN: Sanchez Gov't Faces Uncertain Fallout From Mass Blackouts

Reuters reporting comments from REE, Spain's grid operator, says that the country's power system is "back to normal" after yesterday's mass blackouts. While the country's power network may be back and running, the issues for the gov't of PM Pedro Sanchez may just be beginning. There had been some speculation that the outages, that hit the entire Iberian peninsula as well as French regions along the border, were due to 'abnormal weather phenomena'. 

US TREASURIES

MNI US TSYS: Modest Risk On - Domestic Automakers Hopeful For Tariff Relief

• Treasuries look to finish near near midday highs Tuesday, curves mildly steeper amid decent short end support all day (conditional steepeners via options, Block buying SOFR White packs) as Trump officials reported progress in tariff negotiations without much hard facts.
• Pres Trump to announce "more tariff relief" at a rally in Michigan this afternoon, "domestic automakers will be happy" WH Deputy Chief of Staff Miller said.
• Cautious risk-on support in rates buoyed projected rate cut pricing in the later half of the year (Sep at -61.0bp) while stocks finished near moderate session highs (SPX eminis +35.0 at 5588.0).
• The JOLTS report saw a second month with lower-than-expected job openings, and this time by a greater extent in March. However, layoffs fell to their lowest since June and quit rates surprisingly inched higher.
• US consumer confidence dropped for a 5th consecutive month in April following the November peak per the Conference Board's survey, with the Composite to 86.0 (88.0 expected, 93.9 prior upwardly revised from 92.9) - the lowest since May 2020.
• Focus turns to Wednesday's ADP private jobs data, GDP, Chicago PMI, PCE and Home Sales.

OVERNIGHT DATA

MNI US DATA: A Conflicting JOLTS Report

The JOLTS report saw a second month with lower-than-expected job openings, and this time by a greater extent in March. However, layoffs fell to their lowest since June and quit rates surprisingly inched higher, the latter still low historically but up nearly 0.2pps from November lows. These two conflicting findings should be viewed in the context of the vacancy to unemployed rate still being higher relatively than quit rates. 

• Job openings fell to 7192k (sa, cons 7500k) in March after a downward revised 7480k (initial 7568k) in Feb.
• Ratio of openings to unemployed also fell to 1.02 after a downward revised 1.06 in Feb, inching below the 1.03 in September for technically the lowest since Apr 2021. It had averaged 1.1 through Jun 2024-Feb, between the 1.2 in 2019 and 1.0 in 2017-18.
• Hire rates continued to plateau in March, with an overall rate at 3.39% having averaged 3.38% in an extremely narrow range since October. This remains below the 3.9% averaged in 2019 and 3.8% averaged in 2017-18.
• Layoffs fell to 1558k in March from 1780k for their lowest since Jun 2024. Government layoffs edged higher to 107k after 100k in Feb (averaged 83k in 2024), indicating only modest attrition compared to more ‘normal’ times whilst federal layoffs fell to 8k after 19k (averaged 6k in 2024).
• Quits rates meanwhile saw what to us was a surprising increase albeit it one exaggerated by rounding, lifting to 2.09% after two months at 2.05/2.04%. It’s the highest quit rate since Jul 2024, having lifted off a recent low of 1.91 in Nov, although are still low historically vs 2.3% in 2019 and 2.2% in 2017-18.
• The increase in quits was driven by the private sector (2.25 to 2.32%) whilst total government quits held at a rounded 0.8% for a fifth consecutive month. Within the latter, federal quits ticks a tenth higher to 0.5% after three months at 0.4%. That included February being revised up from 0.3% initially at what had bene a fresh low since late 2016. 

MNI US DATA: Conference Board Confidence Report Sends Recessionary Warning

US consumer confidence dropped for a 5th consecutive month in April following the November peak per the Conference Board's survey, with the Composite to 86.0 (88.0 expected, 93.9 prior upwardly revised from 92.9). That was the lowest since May 2020, so clearly indicative of weak activity (the "present situation" index dipped just 0.9 points, to 133.5).

• But more concerning was the Expectations index falling 12.5 points to 54.4 which was the lowest level since October 2011. The report notes that this is "well below the threshold of 80 that usually signals a recession ahead".
• The report noted "the three expectation components—business conditions, employment prospects, and future income—all deteriorated sharply, reflecting pervasive pessimism about the future", with the percentage of respondents expecting fewer jobs in the next six months rising to nearly April 2009 levels (32.1%).
• On that topic, the closely-watched differential between jobs perceived as "plentiful" vs "hard to get" fell to 15.1 points (plentiful 31.7%, 2nd highest since March 2021, with hard to get 16.6%), down for the 4th consecutive month and indicative of a continued tick-up in the unemployment rate.

MNI US DATA: Largest Goods Trade Deficit As % GDP Since 2006

• March saw a third consecutive blowout for a goods trade deficit relative to expectations, at a record $162.0bn (cons $145bn). It follows January’s $153.3bn (cons 116.6) and February’s $147.9bn (cons 139.0) when looking at figures at the time of release. The deficit stands at circa 6.2% GDP in Q1 from 4.4% GDP in Q4 and having averaged 4.0% GDP in 2024.
• The US last saw a larger deficit in 3mth % GDP terms (and only just) in the imbalances of 2005-06 ahead of the GFC.
• As there has been much focus on, a large part of this had been down to monetary gold transfers, in part from arbitrage flows, that shouldn’t show up in official GDP data.
• That said, today’s release also shows other signs of significant import strength in likely signs of a ramping up of tariff front-running ahead of the Apr 2 “Liberation Day” announcements that had been well touted ahead of time.
• Nominal imports jumped 5.0% M/M amidst some large conflicting flows but ones that should have negative implications for underlying GDP tracking. It follows -0.2% M/M in Mar and a huge 12.4% M/M in Jan. 

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA up 358.66 points (0.89%) at 40585.03
S&P E-Mini Future up 36.25 points (0.65%) at 5589.5
Nasdaq up 97.6 points (0.6%) at 17463.44
US 10-Yr yield is down 4.4 bps at 4.164%
US Jun 10-Yr futures are up 9.5/32 at 112-6.5
EURUSD down 0.0043 (-0.38%) at 1.1377
USDJPY up 0.34 (0.24%) at 142.35
WTI Crude Oil (front-month) down $1.74 (-2.8%) at $60.31
Gold is down $22.71 (-0.68%) at $3321.25

European bourses closing levels:
EuroStoxx 50 down 8.59 points (-0.17%) at 5161.9
FTSE 100 up 46.12 points (0.55%) at 8463.46
German DAX up 154.16 points (0.69%) at 22425.83

US TREASURY FUTURES CLOSE

3M10Y -3.437, -13.021 (L: -13.731 / H: -6.17)
2Y10Y -0.139, 50.795 (L: 50.323 / H: 53.18)
2Y30Y +0.183, 98.318 (L: 97.902 / H: 101.123)
5Y30Y +0.18, 86.967 (L: 85.796 / H: 88.937)
Current futures levels:
Jun 2-Yr futures up 1.5/32 at 104-0.25 (L: 103-28.75 / H: 104-00.75)
Jun 5-Yr futures up 6/32 at 109-3.75 (L: 108-24.75 / H: 109-04)
Jun 10-Yr futures up 9.5/32 at 112-6.5 (L: 111-21.5 / H: 112-07.5)
Jun 30-Yr futures up 25/32 at 117-5 (L: 115-30 / H: 117-06)
Jun Ultra futures up 1-01/32 at 121-29 (L: 120-12 / H: 121-30)

MNI US 10YR FUTURE TECHS: (M5) Bull Cycle Extends

• RES 4: 113-22   1.382 proj of the Apr 11 - 16 - 22 price swing
• RES 3: 113-04   76.4% retracement of the Apr 7 - 11 bear leg
• RES 2: 112-12   61.8% retracement of the Apr 7 - 11 bear leg  
• RES 1: 112-08   High Apr 8
• PRICE:‌‌ 112-03+ @ 15:02 BST Apr 29
• SUP 1: 111-04+ 20-day EMA
• SUP 2: 110-16+/109-08 Low Apr 22 / 11 and the bear trigger
• SUP 3: 108-26+ 76.4% retracement of the Jan 13 - Apr 7 bull cycle
• SUP 4: 108-21   Low Feb 19

Treasury futures are trading higher today as the contract extends the latest rally. Recent gains have resulted in a break of 111-25, 50.0% of the Apr 7 - 11 bear leg. The breach undermines a recent bearish theme and opens 112-12, the 61.8% retracement. On the downside, a reversal and a resumption of weakness, would refocus attention on 109-08, the Apr 11 low and the bear trigger. First key support to watch is 110-16+, the Apr 22 low.

SOFR FUTURES CLOSE

Jun 25 +0.010 at 95.905
Sep 25 +0.030 at 96.320
Dec 25 +0.040 at 96.645
Mar 26 +0.050 at 96.865
Red Pack (Jun 26-Mar 27) +0.045 to +0.050
Green Pack (Jun 27-Mar 28) +0.045 to +0.050
Blue Pack (Jun 28-Mar 29) +0.050 to +0.065
Gold Pack (Jun 29-Mar 30) +0.065 to +0.075

REFERENCE RATES (PRIOR SESSION)
​​​​​​​
US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 4.36% (+0.03), volume: $2.567T
• Broad General Collateral Rate (BGCR): 4.35% (+0.03), volume: $1.047T
• Tri-Party General Collateral Rate (TCR): 4.35% (+0.03), volume: $1.011T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $105B
• Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $279B

FED Reverse Repo Operation

RRP usage rises to $157.537B this afternoon from $148.649B yesterday. Usage had fallen to $54.772B last Wednesday, April 16 -- lowest level since April 2021. Conversely, usage had surged to the highest level since December 31, 2024 on Monday, March 31: $399.167B. The number of counterparties at 37.

MNI PIPELINE: Corporate Bond Roundup: $9B World Bank 2Pt Lion's Share $23B Supply

• Date $MM Issuer (Priced *, Launch #)
• 04/29 $9B *World Bank $4B 3Y +35, $5B 7Y +55
• 04/29 $5B *KFW 5Y SOFR+42
• 04/29 $2B *ADQ $1B 5Y +85, $1B 10Y +95
• 04/29 $1.75B *Swedish Export Credit 3Y SOFR+45
• 04/29 $1.5B #Las Vega Sands $1B 3Y +200, $500M 5Y +225
• 04/29 $1B *GS Private $400M 3Y +225, $600M 5Y +250
• 04/29 $900M *Tyco Electronics $450M each: +5Y +83, 10Y +97
• 04/29 $800M *Weir Group 5Y +160
• 04/29 $500M *Constellation Brands 5Y +107
• 04/29 $500M *Southwestern Public Service 10Y +115
• 04/29 $Benchmark Bahrain 12Y, 8Y Sukuk investor calls
• Expected Wednesday:
• 04/30 $Benchmark IADB 5Y SOFR+45a
• 04/30 $Benchmark CoE Dev Bank 3Y SOFR+37a
• 04/30 $Benchmark Nordic Investment Bank 5Y SOFR+44a

MNI BONDS: EGBs-GILTS CASH CLOSE: Edges Higher On Soft Data

European FI gained slightly on Tuesday, retracing some of the previous session's weakness.

• Gains were fairly steady through the session, with few major headline/macro catalysts, amid a backdrop of data that was largely on the weaker side of expectations.
• Spanish April preliminary HICP came in firmer than expected, though Spanish GDP came in soft.
• ECB consumer inflation expectations rose for both 1Y and 3Y, though the EC Economic Sentiment survey was weaker than expected.
• Below-consensus US job openings and consumer confidence readings added to the theme.
• ECB's Stournaras sounded cautious on moving rates below 2% (from 2.25% at present); an MNI sources piece debate within the Governing Council ahead of the June rate decision.
• Both the German and UK curves bull flattened, with 10Y Gilts touching 3-week lows. Periphery/semi-core EGB spreads widened modestly, with Portugal underperforming.
• Wednesday's calendar includes French GDP and German retail sales/unemployment, but the highlight will be German, French, and Italian flash April inflation.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 0.6bps at 1.736%, 5-Yr is down 1.5bps at 2.044%, 10-Yr is down 2.4bps at 2.497%, and 30-Yr is down 2bps at 2.927%.
• UK: The 2-Yr yield is down 2.3bps at 3.843%, 5-Yr is down 2.8bps at 3.958%, 10-Yr is down 2.9bps at 4.48%, and 30-Yr is down 2.6bps at 5.244%.
• Italian BTP spread up 0.2bps at 111bps /  Portuguese up 1.3bps at 55.3bps 

MNI  FOREX: G10 Currencies Trade Mixed, Antipodeans Underperform

• Despite sentiment in equity markets not necessarily reflecting it, currencies trade with a moderate risk off tone. This has allowed the likes of AUD and NZD to give up the prior session advance, both falling around 0.65% as we approach the APAC crossover.
• Dented sentiment may be stemming from reports regarding Amazon, who on Tuesday denied a report that it planned to list the costs of President Trump's tariffs next to total prices of products after the White House slammed the mega online retailer earlier in the day. The clash came after PunchBowl News, citing an unnamed source, reported the shopping site will soon display the share of a product's cost that is derived from tariffs rolled out this month.
• For AUDUSD specifically, overnight highs at 0.6450 represented 4-month highs for the pair, which has subsequently drifted steadily lower through the session.  Initial key support to monitor is 0.6307, the 50-day EMA, of which a clear break would be a concern for the bullish narrative.
• Elsewhere, lower US yields for a second consecutive session appear to be providing a yen tailwind, with USDJPY pressing towards the 142.00 handle. Technical conditions continue to highlight a dominant downtrend for the pair and below here, 141.49 (Apr 23 low) would provide the first support before the market refocuses its attention on cycle lows at 139.89.
• Economic calendar highlights for Wednesday’s APAC session include Australian CPI and China PMI’s. Later in the session, the focus will be on Eurozone inflation/growth data and US Q1 GDP. Other notable releases include US PCE and ADP, the MNI Chicago PMI and Canada GDP.

WEDNESDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
30/04/2025	0530/0730	***	FR	GDP (p)
30/04/2025	0530/0730	**	FR	Consumer Spending
30/04/2025	0600/0800	**	DE	Import/Export Prices
30/04/2025	0600/0800	**	DE	Retail Sales
30/04/2025	0600/1400	**	CN	MNI China Money Market Index (MMI)
30/04/2025	0645/0845	***	FR	HICP (p)
30/04/2025	0645/0845	**	FR	PPI
30/04/2025	0700/0900	**	CH	KOF Economic Barometer
30/04/2025	0755/0955	**	DE	Unemployment
30/04/2025	0800/1000	***	DE	GDP (p)
30/04/2025	0800/1000	***	IT	GDP (p)
30/04/2025	0800/1000	***	DE	Bavaria CPI
30/04/2025	0800/1000	***	DE	North Rhine Westphalia CPI
30/04/2025	0800/1000	***	DE	Baden Wuerttemberg CPI
30/04/2025	0900/1100	***	IT	HICP (p)
30/04/2025	0900/1000	**	GB	Gilt Outright Auction Result
30/04/2025	0900/1100	***	EU	EMU Preliminary Flash GDP Q/Q
30/04/2025	0900/1100	***	EU	EMU Preliminary Flash GDP Y/Y
30/04/2025	1000/1200	**	IT	PPI
30/04/2025	1100/0700	**	US	MBA Weekly Applications Index
30/04/2025	1200/1400	***	DE	HICP (p)
30/04/2025	1215/0815	***	US	ADP Employment Report
30/04/2025	1230/0830	***	CA	Gross Domestic Product by Industry
30/04/2025	1230/0830	***	US	GDP
30/04/2025	1230/0830	***	US	Employment Cost Index
30/04/2025	1230/0830	***	CA	Gross Domestic Product by Industry
30/04/2025	1230/0830	***	US	Treasury Quarterly Refunding
30/04/2025	1342/0942	***	US	MNI Chicago PMI
30/04/2025	1400/1000	**	US	NAR Pending Home Sales
30/04/2025	1400/1000	***	US	Personal Income and Consumption
30/04/2025	1430/1030	**	US	DOE Weekly Crude Oil Stocks
30/04/2025	1530/1630		GB	BOE Lombardelli At New Economics Teacher Training Launch
30/04/2025	1730/1330		CA	BOC Meeting Minutes
01/05/2025	2300/0900	**	AU	S&P Global Manufacturing PMI (f)
01/05/2025	0030/0930	**	JP	S&P Global Final Japan Manufacturing PMI
01/05/2025	0130/1130	**	AU	Trade price indexes
01/05/2025	0130/1130	**	AU	Trade Balance
01/05/2025	0200/1100	***	JP	BOJ Policy Rate Announcement